Rupert Murdoch’s legacy can only be secured with total media control

A deal for Time Warner would give Rupert Murdoch's 21st Century Fox an
unrivalled position

A deal for Time Warner would give 21st Century Fox rights to America's biggest sports such as Major League BaseballPhoto: Getty Images

By Telegraph staff

9:13PM BST 16 Jul 2014

With his jaw-dropping $80bn (£47bn) approach to buy US media giant Time Warner, Rupert Murdoch has made his intentions crystal-clear: he wants to become the undisputed global “king of content”, and is willing to pay a fortune at the top of the market to get his way. The deal was rebuffed, of course, but Murdoch, who has bounced back from the UK phone-hacking scandal and the split of his corporate empire with remarkable ease, will be back.

A deal for Time Warner would give 21st Century Fox an unrivalled position, bringing with it HBO TV audiences from around the world and rights to America’s biggest sports such as Major League Baseball. In addition, Warner Bros studios would augment Murdoch’s Fox presence in cinemas in fast growing markets across Asia and in Hollywood.

It is clear that Murdoch no longer sees traditional media companies as his main, long-run adversaries. The rivals he really fears are technology giants like Apple, Amazon and Google, which have so effectively threatened the traditional business models of content-generating media companies like 21st Century Fox and News Corp. The world is changing fast, and Murdoch is desperate to fight back; his proposed takeover is thus primarily a defensive move.

If an alternative to Murdoch for Time Warner emerges, it could well come from such a tech giant. These are almost the only companies remaining in the media space with the distribution channels and deep enough pockets to challenge Murdoch. Google’s growing reach beyond traditional search and aggregation into paid content delivery is possibly the biggest challenge to the Australian-born billionaire and his desire to pass his media dynasty on to his children.

The Time Warner deal will also bring the spotlight onto News Corp – the publishing unit that emerged from the split in Murdoch’s unified company two years ago. It faces an even bigger threat from technology based rivals to re-invent its old newspaper brands.

One possible but somewhat dubious option would be for it to buy the Tribune Company – owner of the LA Times and Chicago Tribune – to give it control of a print content empire straddling the whole of North America; it is hard to see how this would help modernise the business, however.

One thing is certain: if content is king, then Murdoch’s strategy for survival is to own it all.

Yes, there are jobs but where is the pay?

Truly astonishing: that is the only way that yesterday’s blockbuster employment numbers can be described. Once again, the UK economy has proved itself to be an awesome job-creating machine.

Employment has reached a new high as a share of the workforce, with 73.1pc in work in the March-May period; it was only that high twice before, in 2004-05 and in 1974.

A new record is likely to be reached over the next few months. While male employment remains a little lower than it was before the financial crisis, female employment – now at 68.1pc – keeps breaching new all-time highs. The total number of hours worked per week in the economy reached 987m, the highest it has ever been; never before has so much work taken place in Britain. Growth over the past year has been driven by all private sector categories: staff positions as well as self-employment, full-time as well as part time, migrants as well as UK-born, young as well as old.

Unemployment is still too high at 6.5pc, of course, but its swift collapse over the past couple of years has confounded all forecasters, including the Bank of England. It is down from 7.8pc a year ago, has reached its lowest level since late 2008 and is dropping like a stone. While a large number of young people remain locked out of the jobs market, with many in a tragic situation, there has also been very rapid progress on the youth front in recent months.

There is a downside to this hugely positive picture, of course, and it is that the main reason why the demand for labour is so high is that its cost keeps on falling. Pay including bonuses for employees was 0.3pc higher than a year earlier. This is equivalent to a real terms pay cut of 1.2pc, given that inflation in the year to May was 1.5pc; no wonder firms are snapping up workers.

The pressure on pay isn’t about to go away: the total number of hours worked rose 1.4pc in the period, faster than GDP. Until productivity starts to go up again, real terms pay will continue to fall. Usually, jobs booms go hand in hand with higher pay – but sadly for George Osborne, who was hoping that the costs of living crisis would be over by now, not this time.

Apple and IBM are the future in the workplace

Apple is to team up with IBM in a new bid to dominate the technologies that power business. The corporate sales and software expertise of IBM will join the hardware genius of Apple.

Apple’s announcement makes clear that the company is not content with the consumer world of iPhones, apps, music and iPads. It will now seek to enmesh its products and services into the fabric of corporate life. For IBM’s part, much of the attraction will be to encourage Apple’s many users to pay for its cloud services.

The iPhone kicked off the “bring your own device” trend that today sees more users than ever providing their own tablets and phones to do work that they would otherwise be doing on frustrating and old devices. Today the iPhone is ubiquitous in the workplace.

This deal, however, is about the future of work, not the present: IBM will certainly give Apple sales and specific business software expertise and access that it lacked previously, albeit only because it didn’t care to develop it itself. It will make IBM a key reseller of iPhones and iPads that get ever more of the devices into the hands of businesses.

But the real game here is not about devices: as work is evolving, the touch-screen, always-on way of interacting with more and more jobs is expanding rapidly. That requires devices that just work, without a doubt, but it requires software and infrastructure that power what appears on those touch screens.

With this deal IBM becomes more attractive to businesses and Apple gets to make the products that are shaping the new, mobile ways of working in workforces around the world. The two companies may have been rivals once, but now they’re a perfect fit.